Table of Contents
2 An Overview of prior Research
2.1 The Statements and their strategic Importance
2.2 Formulation of the Research Questions, Variables and Hypotheses
2.3 The Statements and the Employees
2.3.1 Implementation of a Statement
2.3.2 Examples of empty Statements and their Effect
3.1 Research Method
3.2 Sampling Method
3.3 The Questionnaire
3.4 The Variables
3.5 Analysing the Data
4 Preliminary Bibliography
As the former CEO of Xerox, Anne M. Mulcahy (2003) puts it, “employees are a company's greatest asset - they're your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulus, and make them feel that they are an integral part of the company's mission.”
Originating from the start-up spirit of California’s entrepreneurs, a variety of strategies and tools has been developed to follow this school of thought. However, how can smaller companies execute on this, if they cannot afford napping pods like Google (Businessweek, 2010) or an on-site café like dealers.com (inc.com, 2010)?
A popular managerial tool emerging over the last decades might hold the answer to a meaningful way of employee motivation, guidance and, in the long run, the retaining of valuable staff. Mission and vision statements have long been subject to an academic discussion over internal or external intention and effectiveness (Campell and Yeung, 1991). Nevertheless, they are accepted as an integral part of most company’s leadership strategies, regardless of their size or location. The question heavily discussed in recent academic research concerns the focus and value that results from their usage (e.g. Klemm et al., 1991; Ireland and Hitt, 1992; Campbell, 1997; Bartkus et al., 2000; Leuthesser and Kohli, 1997; Bart, 2001; Mullane, 2002; Bartkus et al., 2002; Brown and Yoshioka, 2003, Avery, 2010). Emphasizing the strategic importance and internal focus, Bart (2001, p.3) concludes, “a collective sense of mission drives the organizational ship towards its chartered course with greater enthusiasm and precision.”
The author of this study had a similar experience, as the young German company that he was working for underwent a change of corporate identity and opted to find a mission/vision. As the topic was also covered in the author’s studies at the University of South Wales, interest for this field and location emerged. This study seeks to evaluate the employee perception and effect that such statements potentially generate for a company outside the Californian spirit and inside one of the most traditional and service-focused European economies, Germany. Benefiting companies that are in the process of finding or examining their statements, the results of this study may be a factor worth considering.
The following sections describe the existing framework of academic research by evaluating how, if at all, mission and vision have been defined as terms, and what the discussion in context of SMEs has concluded in respect to benefits and disadvantages. Hypotheses are set up in the process, serving as a basis for the research. Section three outlines the chosen methodology, as the choices for method, location and limitation are described.
2 An Overview of prior Research
Mission and vision represent abstract, metaphorical terms (Raynor, 1998). Thus, most of the academic research on the topic struggles to determine cohesive and generally valid definitions.
Exemplary of this struggle are attempts of divison by Campell & Yeung (1991), Dalrymple & Parsons (1995) and Raynor (1998). All of them strived to split the term up in order to find generalizability. However, the results differ dramatically, as Campell & Yeung (1991) conclude on a four-part theory-based approach, while Dalrymple & Parsons (1995) choose a practicality-centred four-part division. Raynor (1998) even reasons for the two parts of core competencies and values, which barely overlaps with the definitions of his predecessors.
Vision then is an even more controversial term. Baum et al. (1998) conclude that each leader defines his/her own vision and that no general definition can be given. In contrast, Ciampa & Watkins (1999) and Boal & Bryson (1988) similarly define vision as an ideal image of the future. Adding to this, Bennis & Nanus (1985) describe how it is crucial that such an image shows a future that is, in a substantial and important way, better than the time in which it was created. Departing from these definitions, Burns (2007) finds the two variations of intrinsic, which strives for doing better, and extrinsic, aiming at competing with and successfully beating one´s competitors.
Diverging from splitting the statements, Campell & Yeung (1991) argue that a separation might not be necessary, as ‘vision’ can include most aspects that others have used to define ‘mission’. Lucas (1998) consents with this, as he prefers one over two separated terms, arguing ‘vision’ is more able to inspire, control and guide a company, while sticking to their own set of values, established competencies and goals. Davies & Glaister (1997) describe similar findings, arguing for a combined approach of using ‘mission’ with inspiration, the core concept of ‘vision’.
To acknowledge the above-mentioned academic inconsistencies, the following sections will refer to mission and/or vision as “the statements”.
2.1 The Statements and their strategic Importance
Starting at the most basic level, Bart (2001) argues for the importance of the statements, as he concludes they can answer the existential question of “why do we exist as a company”. Consensus in the effectiveness debate can be found in the works of Falsey (1989) and Smith and Fleck (1987) which, as Alavi and Karami (2009) conclude, underline the importance that these tools have for any company. In research concerning the effect on SMEs, Churchill and Lewis (1983) and O’Gorman and Doran (1999) conclude their findings with the result that high-growth SMEs do not seem to have more comprehensive statements than their low-growth counterparts, thus renouncing their strategic importance.
As for their managerial use, it is found that the statements represent the starting point for the strategic endeavors of any company, as they serve as guidance for a company during their operations (Bart, 2001; Avery, 2010). Toftoy and Chatterjee (2004) extend this point, as they conclude that developing a statement is the first strategic step that a small business should initiate. In Contrast, Alavi and Karami (2009) point out that such young companies might be unable to focus on such an important first step, as the scope of starting a company will potentially force them to focus on the operational side of the business. However, as Toftoy and Chatterjee (2004, p.43) argue, to neglect this first step would leave them as “a traveler without a destination”.
After the rise of the statements as a managerial tool in the 1980s (Nimwegen et al., 2008), their purpose in relation to an evaluation of stakeholder groups was examined by some authors such as Bart (1997) and Leuthesser and Kohli (1997). However, the more recent studies seem to have shifted the focus towards the external aspects (e.g. Bartkus et al., 2000) or specific components (e.g. David and David, 2003) of these tools as applied in UK (Bart, 1997) or US based companies (Nimwegen et al., 2008). While countries such as North America (Bart, 1997), the UK and France (Brabet and Klemm, 1994) have been examined in stakeholder focused studies, the gap of data from Germany, one of the most important economies today (Anderson, 2012), is thus identified and chosen as the location. SMEs, due to their size, are not coercively driven to the adoption of the statements as means to improve public image as a result of sheer public visibility. However, with a 73% proportion of service firms in Germany (Niebel, 2010), an importance of the statements tool in connection to appearance for stakeholders as described in previous sections is likely. The Hoppenstedt database for ‘Mittelstand’ is chosen to define a frame for companies for this research.
 SME in context of the German economy can be translated as “Mittelstand”
- Quote paper
- Nils-Carlsson Reineke (Author), 2013, Mission and Vision Statements in the German Mittelstand. A Research Proposal, Munich, GRIN Verlag, https://www.grin.com/document/289320